Main Types of Shipping Surcharges

There are many factors that affect the shipping cost, ranging from package size and weight to the type of transport used to deliver packages to their destination. To make things even more complicated, carries apply various surcharges to shipments, further increasing the shipping cost. What are the main types of shipping surcharges and is there any way to avoid them?

A surcharge is an extra fee that is added onto another fee or charge, in this case onto the base cost of shipping. Shipping surcharges can include various kinds of fees that are meant to compensate additional handling and transportation costs that carriers might incur. For example, fuel surcharges are applied to cover fuel cost and thus fluctuate depending on the price of fuel, dangerous goods/hazardous materials surcharges are applied to cover the cost of processing dangerous substances and materials, etc.

Different carriers apply different surcharges for shipments. For example, the United States Postal Service (USPS) does not apply fuel surcharges or charge extra fees for rural delivery or residential delivery, whereas private carriers like UPS or FedEx do. In addition, different surcharges may be updated on a different basis: most shipping surcharges are adjusted annually or biannually, depending on the carrier, but fuel surcharges can be updated as often as every week due to fuel price fluctuations. Some surcharges are seasonal, whereas others are permanent.

Although, as we’ve already said, shipping surcharges vary from one carrier to another, some surcharges are more common than others. Here are a few examples of the most typical additional fees that may be applied by shipping carriers.

Additional Handling Surcharge. This surcharge is applied to packages that exceed the maximum size and/or weight limits determined by the carrier. It may depend on the shipping zone and on whether the package is deemed “non-stackable”, which means it cannot be stacked securely due to its shape or packaging.

Address Correction Surcharge. Private carriers may charge an additional fee when your shipment has an incorrect or incomplete address that needs to be corrected in order for the package to get delivered. The USPS typically does not apply this surcharge or only charges a symbolic fee.

Declared Value Surcharge. Most packages have a declared value for insurance and customs purposes. Among other things, it represents the carrier’s liability should something happen to the package. As a rule, the first $100 or so (depending on the carrier and shipping service) is included in the default shipping rate. Declared value surcharges reflect any amount that exceeds this sum and are applied incrementally.

Delivery Area Surcharge. This is a fee applied to the shipping cost of residential and commercial packages delivered to addresses that are outside of the carrier’s standard delivery area, for example, in rural or otherwise remote places. When it comes to delivery within the United States, some carriers charge an additional fee for delivering to places outside of the contiguous US like Alaska and Hawaii.

Peak Season Surcharge. A peak season surcharge is applied to packages shipped during high demand seasons, for example, the fall/winter holiday season in the West (starting in early October and ending in late December or early January) or the holiday period around the Chinese New Year.

Residential Delivery/Pickup Surcharge. This is a fee that private carriers charge for delivering to or picking up from a home address, which may include businesses operating out of one’s place of residence. Keep in mind that different carriers may have a different definition of what constitutes a residential dwelling.

Other shipping surcharge to be aware of include Adult/Direct/Indirect Signature Surcharges, Dangerous Goods/Hazardous Materials Surcharge, Fuel Surcharge, Print Return Shipping Labels Surcharge, Reroute of Shipment Surcharge, Weekly Service Surcharge, and many more.

Are there any ways to avoid shipping surcharges? You cannot avoid all of them — for example, peak season surcharges are applied by most carriers to recoup their operational costs — but there are ways to reduce your shipping costs by understanding the different types of shipping surcharges. For example, you can avoid some of the surcharges applied by private carriers by choosing the USPS, and Additional Handling/Oversize Package Surcharge can be avoided by packing your shipment properly.